New York’s Financial Contributions: State Comptroller Reveals Balance of Payments Between New York and Federal Government
State Comptroller Tom DiNapoli has released his ninth annual analysis of the balance of payments between the states and the federal government, providing a detailed assessment of how taxpayer contributions and federal expenditures interact across the country. This extensive review carries on a tradition that traces back to former Senator Daniel Patrick Moynihan, who began compiling these reports in 1977. Moynihan referred to his analysis as “the fisc,” a term that, while somewhat antiquated, aptly encapsulates the ongoing inquiry into the balance of tax contributions and government spending by state.
The analysis highlights the dichotomy of surplus and deficit states in the United States, categorizing them based on the amount of tax revenue generated for the federal treasury versus the federal funds allocated back to each state. Wealthier states like New York, Massachusetts, and Washington contribute substantial tax revenues but receive comparatively less federal funding, creating a persistent donor status. This contrasts sharply with poorer states such as Mississippi and West Virginia, which rely heavily on federal assistance and, consequently, receive more than they contribute.
The report identifies several key contributors to these dynamics. For instance, states with significant federal installations, such as Virginia, or those hosting large research facilities, like New Mexico’s Sandia and Los Alamos National Laboratories, tend to have a net positive balance thanks to the substantial federal investment in their local economies. Notably, New York finds itself at a disadvantage due to a lower per capita presence of federal employees and limited federal highway funding.
Historically, New York has been one of the nation’s largest donor states, consistently sending more tax revenue to Washington than it receives in return. However, the COVID-19 pandemic altered this equation temporarily, as Congress allocated substantial financial relief to support individuals, businesses, and governments during this crisis. DiNapoli’s report notes that over the past four years, these interventions positioned New York as a surplus state. In fiscal year 2023, for every tax dollar remitted to the federal government, New York received approximately .06 back, a figure that lags below the national average of .32.
Looking forward, DiNapoli expresses concern regarding potential federal policy changes that may disproportionately impact New Yorkers. He warned that actions taken under the previous administration, alongside congressional initiatives, could lead to cuts in vital services such as healthcare, food assistance, and infrastructure funding. Such reductions would exacerbate the longstanding trend of New York taxpayers contributing more to the federal government than they receive in services and aid.
For over two decades, Moynihan’s insights have illustrated the fiscal realities facing New Yorkers, revealing that despite perceptions of receiving an outsized share of federal funding, the data consistently depicts a different story. DiNapoli’s findings reaffirm that New York continues to bear a significant burden in supporting the broader federal budget, reflecting a complex interplay of state and federal fiscal responsibilities. As the discussions surrounding federal funding priorities evolve, the implications for New York and its residents remain a critical subject for ongoing analysis and advocacy.
